news4global
  • Home
  • Bitcoin
  • Blockchain
  • Business
  • Latest news
  • Market
  • Regulation
  • VideosHot
    Luna coin news today tamil | New Token Coming | Luna Classic | Luna coin tamil | Luna coin latest

    Luna coin news today tamil | New Token Coming | Luna Classic | Luna coin tamil | Luna coin latest

    Ripple XRP Price News Today Technical Analysis – Ripple XRP Price Now! Elliott Wave Analysis!

    Ripple XRP Price News Today Technical Analysis – Ripple XRP Price Now! Elliott Wave Analysis!

    🚨 Crypto Big Crash ? | Top Altcoin to buy Now | Crypto News Today | Bitcoin News | Luna Coin News

    🚨 Crypto Big Crash ? | Top Altcoin to buy Now | Crypto News Today | Bitcoin News | Luna Coin News

    How Terra Luna Changed EVERYTHING in Crypto (#1 Takeaway)

    How Terra Luna Changed EVERYTHING in Crypto (#1 Takeaway)

    Something MASSIVE coming for Bitcoin! – Cryptocurrency News Today

    Something MASSIVE coming for Bitcoin! – Cryptocurrency News Today

    VeChain (VET) Price News Today – Technical Analysis Update, Price Now! Elliott Wave Analysis!

    VeChain (VET) Price News Today – Technical Analysis Update, Price Now! Elliott Wave Analysis!

    15/05/2022| Cryptocurrency Tamil news today | Shiba inu coin news | luna crypto news | Bitcoin Tamil

    15/05/2022| Cryptocurrency Tamil news today | Shiba inu coin news | luna crypto news | Bitcoin Tamil

    15 May 2022 बड़ी ख़बर 🚨 Luna Crypto News Today | Why Crypto Market Going Down Today

    15 May 2022 बड़ी ख़बर 🚨 Luna Crypto News Today | Why Crypto Market Going Down Today

    Crypto news today | Shiba inu coin news today | Crypto market crash today | luna crypto coin news

    Crypto news today | Shiba inu coin news today | Crypto market crash today | luna crypto coin news

No Result
View All Result
  • Home
  • Bitcoin
  • Blockchain
  • Business
  • Latest news
  • Market
  • Regulation
  • VideosHot
    Luna coin news today tamil | New Token Coming | Luna Classic | Luna coin tamil | Luna coin latest

    Luna coin news today tamil | New Token Coming | Luna Classic | Luna coin tamil | Luna coin latest

    Ripple XRP Price News Today Technical Analysis – Ripple XRP Price Now! Elliott Wave Analysis!

    Ripple XRP Price News Today Technical Analysis – Ripple XRP Price Now! Elliott Wave Analysis!

    🚨 Crypto Big Crash ? | Top Altcoin to buy Now | Crypto News Today | Bitcoin News | Luna Coin News

    🚨 Crypto Big Crash ? | Top Altcoin to buy Now | Crypto News Today | Bitcoin News | Luna Coin News

    How Terra Luna Changed EVERYTHING in Crypto (#1 Takeaway)

    How Terra Luna Changed EVERYTHING in Crypto (#1 Takeaway)

    Something MASSIVE coming for Bitcoin! – Cryptocurrency News Today

    Something MASSIVE coming for Bitcoin! – Cryptocurrency News Today

    VeChain (VET) Price News Today – Technical Analysis Update, Price Now! Elliott Wave Analysis!

    VeChain (VET) Price News Today – Technical Analysis Update, Price Now! Elliott Wave Analysis!

    15/05/2022| Cryptocurrency Tamil news today | Shiba inu coin news | luna crypto news | Bitcoin Tamil

    15/05/2022| Cryptocurrency Tamil news today | Shiba inu coin news | luna crypto news | Bitcoin Tamil

    15 May 2022 बड़ी ख़बर 🚨 Luna Crypto News Today | Why Crypto Market Going Down Today

    15 May 2022 बड़ी ख़बर 🚨 Luna Crypto News Today | Why Crypto Market Going Down Today

    Crypto news today | Shiba inu coin news today | Crypto market crash today | luna crypto coin news

    Crypto news today | Shiba inu coin news today | Crypto market crash today | luna crypto coin news

No Result
View All Result
news4global
No Result
View All Result
Home Business

APPLIED BLOCKCHAIN, INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements (form 10-Q)

May 13, 2022
Reading Time: 17 mins read
0
APPLIED BLOCKCHAIN, INC. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
Forward-Looking Statements (form 10-Q)
189
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

Related articles

USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

June 24, 2022
USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

June 24, 2022
This Quarterly Report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that involve substantial risks and
uncertainties. In some cases you can identify these statements by
forward-looking words such as "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "plan," "seek," "should," "will," and "would," or
similar words. Statements that contain these words and other statements that are
forward-looking in nature should be read carefully because they discuss future
expectations, contain projections of future results of operations or of
financial positions or state other "forward-looking" information.

Forward-looking statements involve inherent uncertainty and may ultimately prove
to be incorrect or false. These statements are based on our management's beliefs
and assumptions, which are based on currently available information. These
assumptions could prove inaccurate. You are cautioned not to place undue
reliance on forward-looking statements. Except as otherwise may be required by
law, we undertake no obligation to update or revise forward-looking statements
to reflect changed assumptions, the occurrence of unanticipated events or actual
operating results. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including, but not limited to:

•labor and other workforce shortages and challenges;
•our dependence on principal customers;
•the addition or loss of significant customers or material changes to our
relationships with these customers;
•our sensitivity to general economic conditions including changes in disposable
income levels and consumer spending trends;
•our ability to timely and successfully build new hosting facilities with the
appropriate contractual margins and efficiencies
•our ability to continue to grow sales in our hosting business
•volatility of cryptoasset prices
uncertainties of cryptoasset regulation policy

You should carefully review the risks described in the final prospectus of our
Registration Statement on Form S-1 (Reg. No. 333-261278) filed with the SEC on
April 13, 2022, as well as any other cautionary language in this Quarterly
Report, as the occurrence of any of these events could have an adverse effect,
which may be material, on our business, results of operations, financial
condition or cash flows.
Executive Overview

The following discussion and analysis should be read in conjunction with our
consolidated financial statements and the related notes and other financial
information included elsewhere in this Quarterly Report on Form 10-Q.

Business Overview


We build and operate Next-Gen datacenters which are designed to provide massive
computing power. Our first facility was constructed in North Dakota and as of
February 2, 2022 is online and providing 55MW of energy and services to
customers, with the remaining 45MW expected to be brought online during the
second calendar quarter of 2022. We signed an energy services agreement with a
utility to power this facility. We provide energized space for customers to host
computing equipment. Initially, these datacenters primarily will host servers
securing the Bitcoin network but can also host hardware for other applications
such as artificial intelligence, machine learning and other blockchain networks
in the future. We have a colocation business model where our customers place
hardware they own into our facilities, and we provide full operational and
maintenance services for a fixed fee. We typically enter into long-term fixed
rate contracts with our customers.

Trends and Other Factors Affecting Our Business
Regulatory Environment
Our customers' businesses are subject to extensive laws, rules, regulations,
policies and legal and regulatory guidance, including those governing
securities, commodities, cryptoasset custody, exchange and transfer, data
governance, data protection, cybersecurity and tax. Many of these legal and
regulatory regimes were adopted prior to the advent of the Internet, mobile
technologies, cryptoassets and related technologies. As a result, they
                                       27
--------------------------------------------------------------------------------
  Table of Contents
do not contemplate or address unique issues associated with the crypto economy,
are subject to significant uncertainty, and vary widely across U.S. federal,
state and local and international jurisdictions. These legal and regulatory
regimes, including the laws, rules and regulations thereunder, evolve frequently
and may be modified, interpreted and applied in an inconsistent manner from one
jurisdiction to another, and may conflict with one another. Moreover, the
complexity and evolving nature of our business and the significant uncertainty
surrounding the regulation of the crypto economy requires us to exercise our
judgement as to whether certain laws, rules and regulations apply to us or our
customers, and it is possible that governmental bodies and regulators may
disagree with our or our customers' conclusions. To the extent we or our
customers have not complied with such laws, rules and regulations, we could be
subject to significant fines and other regulatory consequences, which could
adversely affect our business, prospects or operations. As cryptoassets have
grown in popularity and in market size, the Federal Reserve Board, U.S. Congress
and certain U.S. agencies (e.g., the Commodity Futures Trading Commission, the
SEC, the Financial Crimes Enforcement Network and the Federal Bureau of
Investigation) have begun to examine the operations of cryptoasset networks,
cryptoasset users and cryptoasset exchange markets. Other countries around the
world are likewise reviewing and, in some cases, increasing regulation of the
cryptoasset industry. For instance, on September 24, 2021, China imposed a ban
on all crypto transactions and mining.

Ongoing and future regulatory actions could effectively prevent our customers'
mining operations and our ongoing or planned co-hosting operations, limiting or
preventing future revenue generation by us or rendering our operations and
crypto mining equipment obsolete. Such actions could severely impact our ability
to continue to operate and our ability to continue as a going concern or to
pursue our strategy at all, which would have a material adverse effect on our
business, prospects or operations.

COVID-19

The COVID-19 pandemic has had unpredictable and unprecedented impacts in the
United States and around the world. The implications of the COVID-19 pandemic on
our results of operations and overall financial performance remain uncertain.
The economic effects of the pandemic and any recovery and resulting societal
changes, including the impact of current labor shortages in the United States,
are currently not predictable, and the future financial impacts could vary from
those foreseen.
To the extent we are providing maintenance and repair services to our customers,
our ability to provide such services may also be hampered by supply chain and
labor disruptions.


Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America ("GAAP"). In
connection with the preparation of our financial
statements, we are required to make assumptions and estimates about future
events and apply judgments that affect the reported amounts of assets,
liabilities, revenue, expenses and the related disclosures. We base our
assumptions, estimates and judgments on historical experience, current trends
and other factors that management believes to be relevant at the time our
consolidated financial statements are prepared. On a regular basis, management
reviews the accounting policies, assumptions, estimates and judgments to ensure
that our financial statements are presented fairly and in accordance with GAAP.
However, because future events and their effects cannot be determined with
certainty, actual results could differ from our assumptions and estimates, and
such differences could be material.

Our significant accounting policies are discussed in Note 3 – Basis of
Presentation and Significant Accounting Policies, of the Notes to Consolidated
Financial Statements of this Quarterly Report on Form 10-Q.

Hosting Operation Highlights


On January 6, 2022, we and Antpool Capital Asset Investment, L.P., an affiliate
of Bitmain Technologies Holding Company, entered into a joint venture in the
form of 1.21 Gigawatts, LLC, pursuant to which we and Antpool contributed $8
million and $2 million, respectively, and will initially own 80% and 20% of 1.21
Gigawatts, respectively. 1.21 Gigawatts will develop, acquire, construct,
finance, operate, maintain and own one or more Next-Gen datacenters with
initially up to 1.5GW of capacity for hosting blockchain infrastructure. We
                                       28
--------------------------------------------------------------------------------
  Table of Contents
are the managing member of 1.21 Gigawatts and are responsible for all site
development, construction and operations of the datacenters. However, certain
activities of 1.21 Gigawatts and its subsidiaries, if any, require the vote of
90% of the then outstanding units of each such entity. As long as Antpool owns
10% or more of the total issued and outstanding units of 1.21 Gigawatts, Antpool
may appoint an individual with industry expertise to serve as an advisor to 1.21
Gigawatts. 1.21 Gigawatts will pay fees to such advisor as reasonably determined
by us as managing member. Transfers by members of units of 1.21 Gigawatts are
prohibited without approval of 90% of units then outstanding, which consent may
be granted or withheld for any reason and transfers of such units to
non-affiliates, after obtaining consent, are subject to a right of first refusal
of other members to purchase some or all of such units. Additionally, Antpool
has the right at any time to convert all or any portion of its 1.21 Gigawatts
units into a number of shares of our Common Stock equal to the capital
contributions by Antpool in connection with the acquisition of such units
divided by $7.50, which will result in an increase in our ownership percentage
of 1.21 Gigawatts.

On February 2, 2022, we brought our North Dakota facility online as to the first
55MW, with the remaining 45MW expected to be brought online during the second
calendar quarter of 2022.
Crypto Mining Operations

On March 9, 2022, the Company ceased all crypto mining operations and completed
the sale of all crypto mining equipment in service. Total proceeds from the sale
of the equipment were $1.6 million, and the Company will recognize a loss $2.9
million on the sale of the equipment during the quarter ending May 31, 2022. The
Company has no plans to return to crypto mining operations in the future as we
grow our co-hosting operations. The results of the crypto mining operations are
accounted for as discontinued operations in our consolidated financial
statements as of and for the period ended February 28, 2022.
Expansion Opportunities

On November 24, 2021, we entered into a letter of intent to develop a facility
in Texas with 200MW of wind power. The arrangement is subject to entry into
definitive agreements by the parties. Construction of the facility began in
March 2022.


We are exploring potential new locations where we intend to replicate our
hosting business model. Additionally, we are evaluating potential partnerships
with owners of low-cost energy sources, with a particular focus on renewable
sources, as a potential avenue to grow our hosting operations.

As our hosting operations expand, we believe our business structure will become
conducive to a REIT structure, comparable to Digital Realty Trust (NYSE: DLR)
and Equinix, Inc. (NASDAQ: EQIX), each of which is a traditional datacenter
operator and Innovative Industrial Properties, Inc. (NYSE: IIPR), a specialty
REIT that similarly services a new growth industry. We have begun to investigate
the possibility, costs and benefits of converting to a REIT structure.
Public Offering and Changes to Equity

On August 13, 2021, the Company filed a registration statement for the resale by
certain selling stockholders of shares of Common Stock with the SEC (Reg. No.
333-258818) (the "Resale Registration Statement") and received a notice of
effectiveness for such registration statement on April 12, 2022. On November 22,
2021, the Company filed a registration statement for the sale by the Company of
shares of Common Stock with the SEC (Reg. No. 333-261278) (the "IPO Registration
Statement") and received a notice of effectiveness for such registration
statement on April 12, 2022. On April 11, 2022, the Company filed a registration
statement for the Common Stock under the Securities Exchange Act of 1934, as
amended, with the SEC which became effective automatically on April 12, 2022.

On April 12, 2022, concurrent with receipt of the notice of effectiveness for
the Resale Registration Statement, all outstanding shares of Series C Preferred
Stock and Series D Preferred Stock were automatically converted (without payment
of additional consideration) into fully paid and non-assessable shares of Common
Stock, consistent with the Series C and Series D Preferred Stock terms. All
rights with respect to the Series C and Series D Preferred Stock terminated upon
conversion.

The Company’s board of directors approved a reverse split of shares of the
Company’s common stock on a one-for-six basis, which was effected on April 12,
2022
(the “Reverse Stock Split”). All references to Common

                                       29
--------------------------------------------------------------------------------
  Table of Contents
Stock, options to purchase common stock, restricted stock units, share data, per
share data and related information contained in the condensed consolidated
financial statements have been retrospectively adjusted to reflect the effect of
the Reverse Stock Split for all periods presented. No fractional shares of the
Company's common stock were issued in connection with the Reverse Stock Split.
Any fractional share resulting from the Reverse Stock Split was rounded down to
the nearest whole share and the affected holder received cash in lieu of such
fraction share.Any fractional share resulting from the Reverse Stock Split was
rounded down to the nearest whole share.

On April 13, 2022, the Company announced its initial public offering of 8
million shares of its Common Stock at $5.00 per share. The shares began trading
on the Nasdaq Global Select Market on April 13, 2022, under the ticker symbol
"APLD."

On April 18, 2022, the Company completed its initial public offering. In
addition, the Company granted the underwriters a 30-day option to purchase up to
an additional 1,200,000 shares of common stock at the public offering price,
less underwriting discounts and commissions. The net proceeds received by the
Company from the offering (after deducting underwriting discounts and commission
and estimated offering expenses) were approximately $36 million. The Company
intends to use the net proceeds to lease or purchase additional property on
which to build additional co-hosting facilities, to construct those facilities,
to enter into additional energy service agreements for each additional site and
for funding its working capital and general corporate purposes.







































                                       30

——————————————————————————–

Table of Contents

Results of Operations Comparative Results for the Three and Nine Months Ended
February 28, 2022 and 2021:


The following table sets forth key components of the results of operations (in
thousands) of Applied Blockchain during the three and nine months ended February
30, 2021 and 2020.
                                                        Three Months Ended                                Nine Months Ended
                                                                                                  February 28,
                                              February 28, 2022   February 28, 2021                   2022       February 28, 2021
Revenues:
Hosting revenue                              $          1,026    $             -                  $    1,026    $              -
Total revenue, net                           $          1,026    $             -                  $    1,026                   -

Cost of revenues                             $          2,073    $             -                  $    2,073    $              -
Gross Profit                                           (1,047)                 -                      (1,047)                  -
Costs and expenses:
Selling, General and Administrative                     1,356                  -                       3,234                   -
Stock-based compensation for service
agreement                                                   -                  -                      12,337                   -
Depreciation                                               14                  -                          14                   -
Total costs and expenses                                1,370                  0                      15,585                   0
Operating loss                                         (2,417)                 -                     (16,632)                  0
Other income (expense):
Interest Expense                                            -                (77)                          -                (223)
Gain on Extinguishment of Accounts Payable                 80                  -                         405                   -
Loss on Extinguishment of Debt                              -                  -                      (1,342)                  -
Income Tax Expenses                                       (60)                 -                        (274)                  -
Total Other Income (Expense)                               20                (77)                     (1,211)               (223)
Net Loss from Continuing Operations                    (2,397)               (77)                    (17,843)               (223)
Net Loss from Discontinued Operations                  (4,048)                 -                      (2,870)                  -
Total Net Loss                               $         (6,445)   $           (77)                 $  (20,713)   $           (223)
Adjusted Amounts (a)
Adjusted Operating Loss from Continuing
Operations                                   $         (2,064)   $             -                  $   (2,289)   $              -
Adjusted Operating Margin from Continuing
Operations                                            (201.17) %               -    %                (223.14) %                -  %

Adjusted Net Loss from Continuing Operations $ (2,044) $

  (77)                 $   (3,500)   $           (223)
Other Financial Data (a)
EBITDA                                       $         (2,092)   $             -                  $  (17,324)   $              -
 as a percentage of revenues                           (203.9) %               -    %                (1688.5) %                -  %
Adjusted EBITDA                              $         (1,739)   $             -                  $   (2,981)   $              -
as a percentage of revenues                            (169.5) %               -    %                 (290.6) %                -  %


(a) Adjusted Amounts and Other Financial Data are non-GAAP performance measures.
A reconciliation of reported amounts to adjusted amounts can be found in the
"Non-GAAP Measures and Reconciliation" section of the MD&A.

                                       31

——————————————————————————–

Table of Contents

Commentary on Results of Operations Comparative Results for the Three Months
Ended February 28, 2022 and 2021:

Revenue:


For the three months ended February 28, 2022, hosting revenue was $1 million,
and there was no data center hosting revenue for the three months ended February
28, 2021. Hosting revenue includes upfront payments which we record as deferred
revenue and generally recognize as services are provided. All of the Company's
revenues were generated from its North Dakota facility which became operational
on February 2, 2022.

Costs and expenses

Cost of revenues for hosting for the three months ended February 28, 2022, was
$2.1 million and there were no hosting costs for the three months ended February
28, 2021. The costs consisted primarily of electricity costs, including costs
for the North Dakota facility under noncancelable purchase commitments prior to
the facility becoming operational on February 2, 2022. Other costs include
personnel cost for employees directly working at the hosting facility and
depreciation expense for equipment in service at the hosting facility.

Selling, general and administrative expenses during the three months ended
February 28, 2022 were $1.4 million and there were no selling, general, and
administrative expenses during the three months ended February 28, 2021. The
2022 costs consist of selling, general and administrative expenses consist of
legal and professional fees, advertising and marketing expenses, and other
personnel and related costs.

Other income and expense:


Other income for the three months ended February 28, 2022 was $20 thousand and
other expense for the three months ended February 28, 2021 was $77 thousand. The
change is primarily related to a decrease in interest expense due to the
conversion of a related party note payable into Common Stock during the first
fiscal quarter of the year ending May 31, 2022, as well as a gain recognized in
the extinguishment of accounts payable, partially offset by an increase in
income tax expense.

Commentary on Results of Operations Comparative Results for the Nine Months
Ended February 28, 2022 and 2021

Revenue:


For the nine months ended February 28, 2022, hosting revenue was $1 million, and
there was no data center hosting revenue for the nine months ended February 28,
2021.Hosting revenue includes upfront payments which we record as deferred
revenue and generally recognize as services are provided. All of the Company's
revenues were generated from its North Dakota facility which became operational
on February 2, 2022.

Costs and expenses:

Cost of revenues for hosting for the nine months ended February 28, 2022, was
$2.1 million and there were no hosting costs for the nine months ended February
28, 2021. The costs consisted primarily of electricity costs, including costs
for the North Dakota facility under noncancelable purchase commitments prior to
the facility becoming operational on February 2, 2022. Other costs include
personnel cost for employees directly working at the hosting facility and
depreciation expense for equipment in service at the hosting facility.

Selling, general and administrative expenses during the nine months ended
February 28, 2022 were $3.2 million and there were no selling, general, and
administrative expenses during the nine months ended February 28, 2021. The 2022
costs consist of selling, general and administrative expenses consist of legal
and professional fees, advertising and marketing expenses, and other personnel
and related costs.
                                       32

——————————————————————————–

Table of Contents

Stock-based compensation during nine months ended February 28, 2022 was
$12.3 million and there were no stock-based compensation costs for the nine
months ended February 28, 2021. The 2022 cost was incurred as part of a service
agreement for the first fiscal quarter in the year ending May 31, 2022.

Other Expenses:


Other expenses for the nine months ended February 28, 2022 was $1.2 million and
other expense for the nine months ended February 28, 2021 was $223 thousand. The
change is primarily related to a loss recognized on the extinguishment of a
related party note to Common Stock during the first fiscal quarter of the year
ended May 31, 2022, as well as recognition of income tax expense during 2022,
partially offset by a reduction of interest expense due to the conversion of a
related party note payable to Common Stock during the first fiscal quarter of
the year ended May 31, 2022, and gains recognized on the extinguishment of
accounts payable.

                                       33

——————————————————————————–

  Table of Contents

                                                         Three Months Ended                                Nine Months Ended
                                                                                                February 28,
$ in thousands                              February 28, 2022         February 28, 2021             2022             February 28, 2021
Adjusted operating loss
Operating Loss from Continuing Operations
(GAAP)                                     $         (2,417)         $             -            $  (16,632)         $              -
Add: Stock-based compensation for service
agreement                                                 -                        -                12,337                         -
Add: Gain on Extinguishment of Accounts
Payable                                                 (80)                       -                  (405)                        -
Add: Loss on Extinguishment of Debt                       -                        -                 1,342                         -
Add: Non-deferred professional service
costs                                                   433                        -                 1,069                         -
Adjusted Operating Loss from Continuing
Operations (Non-GAAP)                      $         (2,064)         $             -            $   (2,289)         $              -
Adjusted operating margin from Continuing
Operations                                           (201.2) %                     -    %           (223.1) %                      -  %

Adjusted net income (loss)
Net Loss from Continuing Operations (GAAP) $         (2,397)         $           (77)           $  (17,843)         $           (223)
Add: Stock-based compensation for service
agreement                                                 -                        -                12,337                         -
Add: Gain on Extinguishment of Accounts
Payable                                                 (80)                       -                  (405)                        -
Add: Loss on Extinguishment of Debt                       -                        -                 1,342                         -
Add: Non-deferred professional service
costs                                                   433                        -                 1,069                         -
Adjusted net loss from Continuing
Operations (Non-GAAP)                      $         (2,044)         $           (77)           $   (3,500)         $           (223)

EBITDA and Adjusted EBITDA
Net Loss from Continuing Operations (GAAP) $         (2,397)         $           (77)           $  (17,843)         $           (223)
Add: Interest Expense                                     -                       77                     -                       223
Add: Income Tax Expense                                  60                        -                   274                         -
Add: Depreciation                                       245                        -                   245                         -
EBITDA (Non-GAAP)                          $         (2,092)         $             -            $  (17,324)         $              -
Add: Stock-based compensation for service
agreement                                                 -                        -                12,337                         -
Add: Gain on Extinguishment of Accounts
Payable                                                 (80)                       -                  (405)                        -
Add: Loss on Extinguishment of Debt                       -                        -                 1,342                         -
Add: Non-deferred professional service
costs                                                   433                        -                 1,069                         -
Adjusted EBITDA (Non-GAAP)                 $         (1,739)         $             -            $   (2,981)         $              -




EBITDA and Adjusted EBITDA

"EBITDA" is defined as earnings before interest, taxes, and depreciation and
amortization. "Adjusted EBITDA" is defined as EBITDA adjusted for stock-based
compensation, gain on extinguishment of accounts payable, loss on extinguishment
of debt, and one-time professional service costs not directly related to the
company's offering and therefore not deferred under the guidance in ASC 340 and
SAB Topic 5A. These costs
                                       34

——————————————————————————–

Table of Contents


have been adjusted as they are not indicative of business operations. Adjusted
EBITDA is intended as a supplemental measure of Applied Blockchain's performance
that is neither required by, nor presented in accordance with, GAAP. Applied
Blockchain believes that the use of EBITDA and Adjusted EBITDA provides an
additional tool for investors to use in evaluating ongoing operating results and
trends and in comparing its financial measures with those of comparable
companies, which may present similar non-GAAP financial measures to investors.
However, you should be aware that when evaluating EBITDA and Adjusted EBITDA,
Applied Blockchain may incur future expenses similar to those excluded when
calculating these measures. In addition, Applied Blockchain's presentation of
these measures should not be construed as an inference that its future results
will be unaffected by unusual or non-recurring items. Applied Blockchain's
computation of Adjusted EBITDA may not be comparable to other similarly titled
measures computed by other companies, because all companies may not calculate
Adjusted EBITDA in the same fashion.

Because of these limitations, EBITDA and Adjusted EBITDA should not be
considered in isolation or as a substitute for performance measures calculated
in accordance with GAAP. Applied Blockchain compensates for these limitations by
relying primarily on its GAAP results and using EBITDA and Adjusted EBITDA on a
supplemental basis. You should review the reconciliation of net loss to EBITDA
and Adjusted EBITDA below and not rely on any single financial measure to
evaluate Applied Blockchain's business.
The Sources of Liquidity

We have generated cash from the sale of our convertible preferred stock, the
sale of Ether generated from our discontinued mining operations, and the receipt
of contractual deposits and revenue pre-payments from hosting customers. Since
December 2020, when we began planning to acquire or build an operational
business, we have raised aggregate gross proceeds of $49 million from issuances
of our convertible preferred stock. On April 15, 2021, we received $16.5 million
in gross proceeds from the issuance of our Series C Convertible Redeemable
Preferred Stock and on July 30, 2021, we received $32.5 million in gross
proceeds from the issuance of our Series D Preferred Stock. On April 18, 2022,
we received $40.0 million in gross proceeds from the issuance of 8 million
shares of the Company's Common Stock in conjunction with the closing of our
initial public offering. During fiscal year 2021, we did not generate any
revenue from crypto mining, co-hosting or otherwise. We have incurred net losses
from operations. In June 2021, as a result of commencement of our crypto mining
operations, we began to generate revenue. As of February 28, 2022 and May 31,
2021, we had cash of $12 million and $11.8 million respectively, and an
accumulated deficit of $(52.5) million and $21.6 million, respectively. On March
11, 2022, we entered into a term loan agreement for $7.5 million for a term of
five years with an interest rate of 5% per annum. The proceeds of the term loan
will be used for working capital needs for the operation of Phase I of the
hosting facility in Jamestown, North Dakota.

Funding Requirements


Having ceased our prior operations in 2014, we have experienced net losses until
the first quarter of our fiscal year ending May 31, 2022, with net losses also
heaving been incurred in the second and third quarters of our fiscal year ending
May 31, 2022. Our transition to sustained profitability is dependent on
successful operation of our co-hosting facilities. We believe that amounts we
received from our April 2021 and July 2021 sales of convertible preferred stock,
from our crypto mining operations, prior to cessation of such operations on
March 9, 2022, proceeds from our initial public offering, and revenue we have
begun to achieve in our co-hosting operations since our first co-hosting
facility was brought online as to 55MW on February 2, 2022, after planned
expenditures to build our co-hosting operations, will be sufficient to meet our
working capital needs for at least the next 12 months.

We expect that our general and administrative expenses and our operating
expenditures will continue to increase as we continue to expand our operations
and as we bear the costs of being a public company. We also expect that our
revenues will increase as we continue to bring online additional capacity,
including the remaining 45MW of capacity at our first operational co-hosting
facility. We expect to need additional capital to fund continued growth, which
we may obtain through one or more equity offerings, debt financings or other
third-
                                       35

——————————————————————————–

Table of Contents


party funding. Because of the numerous risks and uncertainties associated with
the crypto mining industry, we are unable to estimate the amount of increased
capital we may need to raise to continue to build additional co-hosting
facilities and we may use our available capital sooner that we currently expect.

We believe that our existing cash, together with the anticipated revenues from
current operations, will enable us to fund our operating expense requirements
through at least 12 months. We have based our estimates as to how long we expect
we will be able to fund our operations on assumptions that may prove to be
wrong, and we could use our available capital resources sooner than we currently
expect, in which case, we would be required to obtain additional financing
sooner than currently projected, which may not be available to us on acceptable
terms, or at all. Our failure to raise capital as and when needed would have a
negative impact on our financial condition and our ability to pursue our
business strategy.

© Edgar Online, source Glimpses

Tags: 21e27aactandAPPLIED BLOCKCHAINascontainsexchangeINC. stock exchangeinformationmeaningnewsofof | APLD | US0381692070press releasequarterlyreportsectionsecuritiesstatementsthethiswithin
Share76Tweet47

Related Posts

USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

by admin
June 24, 2022
0

USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits.  AS USA

USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

by admin
June 24, 2022
0

USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits.  AS USA

Crypto broker Voyager Digital lowers daily withdrawal limits to $10,000

Crypto broker Voyager Digital lowers daily withdrawal limits to $10,000

by admin
June 23, 2022
0

Crypto broker Voyager Digital Ltd has lowered its daily withdrawal limits to $10,000 from $25,000, according...

Senate bill a step forward for cryptocurrency regulation

Senate bill a step forward for cryptocurrency regulation

by admin
June 22, 2022
0

As cries for cryptocurrency regulation continue to increase, experts say a recently proposed bipartisan Senate bill sets the stage...

Crypto broker Voyager likely to issue default notice to Three Arrows

Crypto broker Voyager likely to issue default notice to Three Arrows

by admin
June 22, 2022
0

Crypto broker Voyager Digital Ltd said on Wednesday its subsidiary may issue a default notice to Three Arrows Capital Ltd...

Load More
  • Trending
  • Comments
  • Latest

Bitcoin Is ‘Definitely Not a Fraud,’ CEO of Mobile-Only Bank Revolut Says

March 2, 2022

Bitcoin’s Main Rival Ethereum Hits A Fresh Record High: $425.55

March 3, 2022
How online shopping has changed over the last 30 years | National

How online shopping has changed over the last 30 years | National

April 6, 2022

India: Bitcoin Prices Drop As Media Misinterprets Gov’s Regulation Speech

March 4, 2022

US Commodities Regulator Beefs Up Bitcoin Futures Review

0

Bitcoin Hits 2018 Low as Concerns Mount on Regulation, Viability

0

India: Bitcoin Prices Drop As Media Misinterprets Gov’s Regulation Speech

0

Bitcoin’s Main Rival Ethereum Hits A Fresh Record High: $425.55

0
The new TC Pod, Chain Reaction, Found, Equity and The TechCrunch Live Podcast – TechCrunch

Bill Gates on climate, the current health of fintech, and Latashá on what web3 offers artists – TechCrunch

June 24, 2022
USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

June 24, 2022
Crypto, Virtual Assets To Soon Be Subject to 1% TDS: Govt Issues Clarifications – The Quint

Crypto, Virtual Assets To Soon Be Subject to 1% TDS: Govt Issues Clarifications – The Quint

June 24, 2022
First Mover Americas: AXS up 15% on Ronin Network News, BTC at $21K – CoinDesk

First Mover Americas: AXS up 15% on Ronin Network News, BTC at $21K – CoinDesk

June 24, 2022

Latest News

The new TC Pod, Chain Reaction, Found, Equity and The TechCrunch Live Podcast – TechCrunch

Bill Gates on climate, the current health of fintech, and Latashá on what web3 offers artists – TechCrunch

June 24, 2022
USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

USA finance and payments live updates: mortgage rates, Bitcoin prices, S.S dissability, unemployment benefits. – AS USA

June 24, 2022

Categories

Site Navigation

  • Home
  • About us
  • Contact us
  • Privacy policy
  • Terms and services
  • Home
  • About us
  • Contact us
  • Privacy policy
  • Terms and services

© 2022 Designed by news4global

No Result
View All Result
  • Home
  • Bitcoin
  • Blockchain
  • Business
  • Latest news
  • Market
  • Regulation
  • Videos

© 2022 Designed by news4global